Charles Taylor buys Chile-based loss adjuster for up to $14.5m

Charles Taylor has announced the acquisition of five companies from the FGR Group, a claims programme management and loss-adjusting business, for up to $14.5m.

The Chile-based company employs around 385 people in 17 locations and has a growing presence across Latin America. Charles Stanley said it is often called upon during major catastrophic events in the Latin America and surrounding regions, such as earthquakes, windstorms and floods, with the opportunity for substantial incremental revenue and profit.

The company said the deal extends its existing office network, presence and client relationships across Latin America and positions it as one of the leading international claims programme management and loss-adjusting firms there.

The acquisition is expected to enhance profits and earnings per share in 2019 and to provide strong prospects for profitable growth thereafter.

Chief executive officer David Marock said: "This acquisition demonstrates our commitment to growing our capabilities in Latin America following our recent acquisition of insurance technology provider, Inworx. It marks an important step forward in delivering our strategy to achieve market leading positions for each of our businesses and expand into growing economies and markets. I am very pleased to welcome our new colleagues from FGR to Charles Taylor."

Liberum said the transaction looks sensible on all fronts.

"As well as offering a number of potential strategic benefits, the deal is attractive from a financial perspective. Based on management’s current expectations for the deferred consideration due, we estimate a take-out multiple of just 6.7x - materially below that implied by other recent industry transactions.

"We also increase our FY19 earnings per share estimate by 3%, and now expect the group to deliver 12.5% per annum growth over the FY18-20. With this profile far from reflected in the current rating we reiterate our buy rating and 385p target price."

At 1400 BST, the shares were up 1.3% to 270p.